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Resale Certificate

Started by ConchoP • 17 replies • 404 views

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ConchoP (Texas)
Posts: 208
Posted:
A Resale Certificate (RC) is required by Section 207.003 of the Texas Property Code and is included in our new corporate bylaws.

Some Texas HOAs allow sellers/buyers to waive the Resale Certificate (RC) for the Statement of Account (SOA) and charge a lower amount. However, we cannot find anything that states the RC can be waived for an SOA.

Can an RC be waived for an SOA?
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By ConchoP on 11/19/2023 9:24 AM
A Resale Certificate (RC) is required by Section 207.003 of the Texas Property Code and is included in our new corporate bylaws.
What is required is that the HOA provide an RC within a certain time upon an owner's request for the RC and when certain other conditions are met. If an owner does not request an RC, the HOA has no obligation.

Quote:
Posted By ConchoP on 11/19/2023 9:24 AM
Some Texas HOAs allow sellers/buyers to waive the Resale Certificate (RC) for the Statement of Account (SOA) and charge a lower amount. However, we cannot find anything that states the RC can be waived for an SOA.

Can an RC be waived for an SOA?
An owner can request something other than the RC. If the owner fails to request the RC, that's on him/her (and possibly the title company), not the HOA.
ConchoP (Texas)
Posts: 208
Posted:
Quote:
Posted By ElleN on 11/19/2023 9:56 AM
Posted By ConchoP on 11/19/2023 9:24 AM
A Resale Certificate (RC) is required by Section 207.003 of the Texas Property Code and is included in our new corporate bylaws.
What is required is that the HOA provide an RC within a certain time upon an owner's request for the RC and when certain other conditions are met. If an owner does not request an RC, the HOA has no obligation.

Quote:
Posted By ConchoP on 11/19/2023 9:24 AM
Some Texas HOAs allow sellers/buyers to waive the Resale Certificate (RC) for the Statement of Account (SOA) and charge a lower amount. However, we cannot find anything that states the RC can be waived for an SOA.

Can an RC be waived for an SOA?
An owner can request something other than the RC. If the owner fails to request the RC, that's on him/her (and possibly the title company), not the HOA.



So the title company or owner can request either an RC or SOA, and we can charge for them if our Bylaws allow? Can transfer fees be part of this charge?
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By ConchoP on 11/19/2023 10:13 AM
So the title company or owner can request either an RC or SOA, and we can charge for them if our Bylaws allow? Can transfer fees be part of this charge?
As you may recall, nationwide "transfer fees" have been a hot topic and a source of conflict for some years (decades?) now. Many state legislatures have passed laws regulating transfer fees.

When "transfer fees" come up at this forum, AFAIC the first step to take is to determine what the particular state involved defines "transfer fees" to be. Because from one state to another, it's not at all necessarily the same.

Notice that TPC 207.003 (b) (13) refers to an "administrative transfer fee." Notice that TPC 207.003 (c) says this:

A property owners' association may charge a reasonable and necessary fee, not to exceed $375, to assemble, copy, and deliver the information required by this section and may charge a reasonable and necessary fee, not to exceed $75, to prepare and deliver an update of a resale certificate under Subsection (f).

Hence to me, your HOA can charge for the administrative costs of preparing materials for a property transfer, as detailed in, and limited by, TPC 207.003.

I am not sure if your bylaws have to speak expressly to this. Usually a HOA's Declaration has some verbiage about any service the HOA performs for a single owner being billable to the owner. The HOA just has to be reasonable about this.

Note:
Texas also has restrictions on certain "private transfer fees." I do not think this is relevant here. Said "private transfer fees" are a covenant-authorized (but today, likely statutorily prohibited in Texas) charge. For example, a covenant might say "1% of the final sales price shall be deliverable to the declarant... " The Texas legislature went after such "private transfer fees" over a decade ago, passing laws to restrict them. See https://statutes.capitol.texas.gov/Docs/PR/htm/PR.5.htm. But again, I do not think this is what you are asking about.
ConchoP (Texas)
Posts: 208
Posted:
What is the definition and or example of an update of a the Resale Certificate?

ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By ConchoP on 11/19/2023 12:36 PM
What is the definition and or example of an update of a the Resale Certificate?
Don't you think TPC 207.003(g) clarifies this? It appears that an update has been requested when another request for an RC is made within 180 days of the issue date of the original RC, pursuant to section 207.003(a). Such is my impression, anyway.
ConchoP (Texas)
Posts: 208
Posted:
Quote:
Posted By ElleN on 11/19/2023 12:57 PM
Posted By ConchoP on 11/19/2023 12:36 PM
What is the definition and or example of an update of a the Resale Certificate?
Don't you think TPC 207.003(g) clarifies this? It appears that an update has been requested when another request for an RC is made within 180 days of the issue date of the original RC, pursuant to section 207.003(a). Such is my impression, anyway.

My apologies I didn’t read that far down.It appears so.
JulieH4
Posts: 75
Posted:
Quote:
Posted By ConchoP on 11/19/2023 9:24 AM
A Resale Certificate (RC) is required by Section 207.003 of the Texas Property Code and is included in our new corporate bylaws.

Some Texas HOAs allow sellers/buyers to waive the Resale Certificate (RC) for the Statement of Account (SOA) and charge a lower amount. However, we cannot find anything that states the RC can be waived for an SOA.

Can an RC be waived for an SOA?

A resale certificate is required and requested by the buyers agent. You can charge up to $375.00 per resale certificate. I have not had a sale here in Houston where one was not requested.

As for the transfer fee, it must be in your by-laws what will be charged. We are about to amend ours to include a 1% transfer fee per sale.
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By JulieH4 on 11/21/2023 10:48 AM

A resale certificate is required
To be clear: Texas statutes do not require the HOA to do anything, with regard to the resale certificate, unless the seller requests it.

Quote:
Posted By JulieH4 on 11/21/2023 10:48 AM
As for the transfer fee, it must be in your by-laws what will be charged. We are about to amend ours to include a 1% transfer fee per sale.
By my reading Texas statutes require such a provision (for a transfer fee) to be in the Declaration.
HollyC4 (Idaho)
Posts: 8
Posted:
Ellen, forgive me but this is as close as I have seen to our current topic needing clarification!
In Idaho, can our HOA charge a set up fee to buyers? I have seen transfer fee" used online but we dont know if it's the same thing.
I found Chapter 31 Title 55 that says "real estate tranfer fees are unlawful" but is s=this the same?
We have nothing in our loose CCRs to explicitly say we can - or can NOT do most anything.
THis is a new HOA turned over from a declarant who had different rules for his company before a turnover to the members and a new HOA board.
We are hopelessly confused -and hamstrung, and trying to sort this out before the new year!
THx
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Holly

It is not uncommon for an association to have an initial buy in charge (typically a % of sale price or and amount of dues such as 6 months) upon a resale. Often called Capital Improvement Fee, etc. Just not called a Transfer Fee and the fee goes direct to the association.
HollyC4 (Idaho)
Posts: 8
Posted:
John,
Thank you for your reply. Idaho repealed and updated and clarified the Homeowners' Act last year. The previous records we have definitely show a "set up fee" on the ledgers and we were told the $250 fee was the average cost in this area.
It's a lot less than we have paid in other areas.
The board doesnt know if it's still legal to charge one, we'd like to find out before another unit sells on the new board's watch. THe CCRs are very vague, it is not mentioned.

Thank you for your information!
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By HollyC4 on 12/02/2023 2:02 PM
Ellen, forgive me but this is as close as I have seen to our current topic needing clarification!
In Idaho, can our HOA charge a set up fee to buyers? I have seen transfer fee" used online but we dont know if it's the same thing.
I found Chapter 31 Title 55 that says "real estate tranfer fees are unlawful" but is s=this the same?
Per the definitions section of Chapter 31, Title 55, and by my reading, a reasonable "setup fee" and a "transfer fee" are not the same thing. See 55-3102 (4) (f) at https://legislature.idaho.gov/statutesrules/idstat/title55/t55ch31/

Note also that the Idaho HOA Act speaks a bit more to this at 55-3205 (2). See https://legislature.idaho.gov/statutesrules/idstat/Title55/T55CH32/SECT55-3205/

Quote:
Posted By HollyC4 on 12/02/2023 2:02 PM
We have nothing in our loose CCRs to explicitly say we can - or can NOT do most anything.
I would have to see your CCRs and bylaws to comment intelligently on where your governing documents allow a one-time bill to new owners. In general nationwide declarations usually have some kind of language that says, within reason, if one owner causes an expense to the HOA, the HOA is allowed to assess the one owner for this expense. Even if this language is absent, case law tends to support this. E.g. if an owner trashes the clubhouse (because he had a bunch of drunks at a party there), of course the HOA can bill the owner for the damage.
ElleN (Idaho)
Posts: 4,420
Posted:
HollyC4, is this a condominium?

If so, disregard my reference to the Idaho HOA act above.

Respectfully, always state in your posts whether you are talking about a condominium or non-condo HOA.
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By ElleN on 12/02/2023 5:35 PM

Note also that the Idaho HOA Act speaks a bit more to this at 55-3205 (2). See https://legislature.idaho.gov/statutesrules/idstat/Title55/T55CH32/SECT55-3205/
The Idaho Condo Act says similar at https://legislature.idaho.gov/statutesrules/idstat/title55/t55ch15/sect55-1528/
HollyC4 (Idaho)
Posts: 8
Posted:
Ellen, we kept the "set-up fee" that was already being used. The developer's remote management company still has all of the past and present HOA records/book keeping - and power.
We're told they charge and keep the estoppel fees the title companies request at closing and they also collect the set up fee and deposit that into our
HOA operating funds.
We've had two units sell in 2024; we are watching for the owners on record to change and the deposits to be recorded. (One sale was at New Year's but the monthly dues billing shows the old owners as owing the March dues.)

Thank you.

HollyC4 (Idaho)
Posts: 8
Posted:
Apologies for my no reply to your response, Ellen.
We were told we are an HOA; the realtors describe our townhomes as condos when they go on the market and so does our insurance policy.
We were not able to get an answer to that very question from the inherited "management" that proclaims itself a seasoned HOA business but is not.
We were given very incorrect advice every time we we asked.
Our east Idaho area seems to be behind the times as far as HOA communities; there are property managers for rental owners but that's it, which must be why all management is remote. A small business here who learned the HOA business can have a kick butt niche market that is rapidly widening as HOAs increase and multi family housing is env=couraged by the city planners.

We board members we are only still involved in this new HOA to keep the small community more than a "multi family housing ghetto" until we can afford to move or retire. We have all lived in HOAs elsewhere; it was never like this, where local businesses aren't familiar with - and don't want to manage even a small HOA of this type of property.

So, back to the original question; we don't know what kind of HOA we are; nobody seems to be able to tell us what makes us a regular HOA versus a Condominium HOA.
Maybe all condos have amenities? We do not. Would is be easier to have a condo property?

Our HOA is obligated to maintain and repair the roof, building exterior, gutters and carports. We maintain and repair the fencing around the retention ponds and each townhome's tiny front yard. We insure it all plus we are obligated to rebuild a home's interior in case of fire or whatever causes the damage. damage. The HOA must pay for the yard services and snow removal in winter from the fire lane/parking access to the carports as well as the sidewalks on the street.

We are very new and have the builder's boiler plate CCRs. We changed the insurance policy to remove the commercial clauses; without amended CCRs we are responsible for everything which must have helped sales until turnover.

HollyC4 (Idaho)
Posts: 8
Posted:
Ellen,

We were sure awaiting those "set up" or "transfer fees" from homes sales to augment our operating budget; the HOA's only source of income are the monthly "dues/assessments". We are a non profit HOA corporation.

We were told by our mgmt. rep that "set up fee" and "transfer fee" could be used interchangeably; we just needed to decide on an amount. so the board met, voted on and approved an amount in November to be used on all future home closings. As the builder has been collecting a "set up fee" for each new home sold; the rep had said we could keep that same terminology; it seemed like we inherited a fee function that only needed to be voted upon with a new amount. The mgmt. rep was emailed what amount to use, the minutes were added to the portal (all board meetings and minutes are open to homeowners) and we were set....

When we finally had a home closing we were then told that charging a fee at closings had to be in our HOA CCRs. WE are now "different" than the declarant.

We are wondering if a "set up fee" was still in place and charged at the closing; the builder changed his address on record with the state to the mgmt. company's address (all the homes were sold and he was ready to turn over the HOA.) Did the set up fee get charged and go to his other accounts with the mgmt. company? They are still working with him on other projects. We know which title company was used, but the details are not online/accesible.

What term should be used for this "transfer fee"? There is a lot of conflicting advice online!

Thx

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